From Start-Up Nation To Scale-Up Nation
Innovation The Tel Aviv Way
This past November I traveled to Tel Aviv. I wanted to meet with the local start-up scene, to discover the Israeli culture, and to visit our business partner SOSA.
For my first trip to the country, I was able to visit innovations hubs, start-ups, incubators, vcs, and many more people from the local innovation ecosystem. And I wasn’t alone, but rather travelled together with representatives of German family offices eager to invest or already investing in the Israeli tech scene.
My first impression of the city of Tel Aviv was a baffling and exciting blend. Arriving on a Friday afternoon makes you realize what shabbat means for public life.
Israel is both a modern state and the only country in the world with Judaism as a state religion, and this shows on Fridays: There was no public transportation from the airport, the city calmed down, families were at home celebrating shabbat — but restaurants and bars were open for business. Maybe other Israeli cities are different, but Tel Aviv did not give the impression to be an overly religious place — rather the city feels like a young and vibrant place, where anyone can make a fortune with a good idea and some venture capital.
Exploring the city on a scooter is fun. But history is clearly everywhere. References to conflicts and wars are part of everyday life. The cityscape is characterized by a mixture of old and new architecture. Amidst the many timeless Bauhaus buildings, tribute to the large number of German architects who fled the Nazi regime, there are also countless construction sites of skyscrapers and green low-energy buildings.
Even my hotel had a historical dimension to it, having been completely rebuilt after near destruction in a 1975 terrorist attack by the PLO.
The beach offers a welcome open space, which Tel Aviv people of all ages use extensively, playing makot (a popular racket game), surfing the waves, doing their workout or simply strolling around and displaying their often well-toned bodies.
The mixed sounds of the makot balls and rippling waves create a unique soundscape.
The following days were filled to the brim with extraordinary energy and people. Our partner in Tel Aviv was able to connect us to the most prestigious venture capital firms: Viola Ventures , Pitango Venture and Grove Ventures.
All of these companies invested in start-ups and were able to grow some of them into unicorns. Most of the partners we spoke to were already successful entrepreneurs, now managing and scaling other start-ups. Everything in this growing network revolves around founding, exit fundings, reinvesting and scaling.
We sat down with serial entrepreneur Dov Moran. He is the inventor of the technology behind the usb stick. He sold his company to SanDisc for $US1.6 billion, but later failed with other investments. He now runs the investment company Grove Ventures with a handful of unicorns in its portfolio.
We were fascinated by the underlying patterns to his story. No doubt it was the combination of his army background, lack of fear of failing, great education, thriving network and fierce ambition that was the key to his success. Everybody was able to provide us with a clear position and portfolio strategy. They all talked about deep tech, not any investment in the next facebook.
There was one example I found particularly stunning: a microchip running without a battery (radio waves are enough) and inexpensive enough that it could be used for tracing and tracking any parcel. We all sensed that a great many future technologies are invented and scaled in Israel.
Does it come as a surprise that the Israeli VC industry too realised that they had to be innovative? New ways to provide companies with innovative ideas are entering the global market. SOSA for example specialises in matching companies with a huge number of mature start-ups. This way companies can address their needs and problems, and, via SOSA, gain access to tailored solutions offered by creative start-ups. This is an effective way to manage innovation. Instead of running your own company incubator you can outsource the whole search and integration process to a specialised service provider.
What did I bring back home?
Everybody we met was friendly and open, and eager to conquer the global market. The start-up culture of Tel Aviv is clearly very dynamic. The vibrant energy and fierce demand for new markets are contagious, and I am looking forward to going back to Israel soon.
